A decision making model for selection of café location: An ANP approach

Abstract

Decision-making in business location selection is a challenging task for companies because it involves multiple alternatives and criteria. Previous studies have investigated this problem using various approaches, and AHP/ANP-based decision-making approach is the most used one due to its capabilities in dealing with the complex problem. Although numerous studies have adopted AHP/ANP approach in determining the business location, but most of them were conducted in the large-scale enterprises and not in the context of culinary business such as cafe. This study is intended for selecting the best business location alternative in the context of small enterprise of culinary industry. We developed a decision-making model based on theories and experiences of the culinary expert to choose the best café location. A total of five major criteria we identified namely location characteristics, demography, competition, physical features, and cost. Each major criterion consists of elements that range from two to five elements. Because there are relationships among elements, therefore we develop a network model, which depicts the criteria, sub criteria, alternatives, and their interactions. We apply ANP by using expert opinion to analyse the importance of each criterion and the rank of each alternative. The final result displays that the competitor strength is the highest importance for small enterprises in selecting the best business location.